The term charge has not been defined under the Companies Act, 1956. Section 124 states that the expression "Charge" includes a mortgage. However, the language of section 125 of the Act throws light upon the scope of the word charge. The expression "so far as any security on the company's property or undertaking is conferred thereby" makes it clear that a charge is nothing but security of its property by the company in favour of a creditor with the intent of securing his debt.
As per section 125(4), the following kinds of charges are mandatory and these charges needs to be registered with the Registrar of Companies:—
(a) A charge for the purpose of securing issue of debentures; (b) A charge on uncalled share capital; (c) A charge on the immovable property, wherever situated, or any interest therein; (d) A charge on any book debts; (e) A charge, not being a pledge, on any movable property; (f) A floating charge on the undertaking or any property of the company including stock-in-trade; (g) A charge on calls made but not paid. Section 14 of the Banking Regulation Act, 1949 debars a bank from creating a charge on any unpaid capital; (h) A charge on a ship or any share in a ship; (i) A charge on a goodwill, patent or on a license under a patent or on a trademark or on a copyright or license under a copyright.
10 November 2013
Registration of charge in connection with the issue of debentures:
Section 128 allows registration of certain particulars in case where a company issues a series of debentures and the debenture holders are entitled pari passu to the benefit of a charge created for the benefit of debenture holders. The company shall file following particulars with the concerned Registrar of Companies for registration of charge under section 125(4):— (1) The total amount secured by the whole series. (2) The dates of the resolutions authorising the issue of the series and the date of the covering deed, if any, by which the security is created or defined. (3) A general description of the property charged. (4) The names of the trustees, if any, for the debenture holders. (5) The deed containing the charge or a duly verified copy thereof. (6) Particulars as to the amount or rate percent of the commission discount or allowance paid or made in connection with debentures. [Section 129] Following points shall be noted in this regard:— (a) Failure to file particulars of such charge with the Registrar of Companies shall not affect the validity of the debentures issued. (b) Debentures may itself contain a charge or give a reference as to any other instrument in this regard. (c) The particulars of charge as given above shall be filed together with the deed containing the charge, or a copy of the deed verified in the prescribed manner, or if there is no such deed, one of the debentures of the series. (d) The company shall file with the Registrar, particulars of the date and amount of each issue of debentures of series, if there is more than one, but failure to file such particulars shall not affect the validity of the debentures issued. (e) Debentures must also be registered under the Indian Registration Act. (f) Section 133 requires that the company shall cause a copy of every certificate of registration given under section 132, to be endorsed on every debenture or certificate of debenture stock which is issued by the company and the payment of which is secured by the charge so registered.
A company shall not be required to cause a certificate of registration to be endorsed on any debenture or certificate of debenture stock issued by the company, before the charge was created. [Proviso to section 133]
If any person knowingly delivers, or authorises or permits the delivery of any debenture or certificate of debenture stock which is required to be endorsed with a copy of a certificate of registration, as stated above, without the copy being so endorsed upon it, he shall, without prejudice to any other liability, be punishable with fine which may extend to rupees ten thousand.
10 November 2013
Responsibility for filing particulars for registration of charge:
It shall be the duty of a company to file with the Registrar, for registration, the particulars of every charge created by the company, and of every issue of debentures of a series, requiring registration under Part V of the Companies Act. Particulars for registration of any charge may also be filed by any person interested therein. In this connection, it may be noted that section 134(2) provides that where registration is affected on the application of some person other than the company, that person shall be entitled to recover from the company, the amount of any fees properly paid by him to the Registrar. If particulars of charge have been sent and Registrar conveys an objection, charge is deemed to have been registered, though they have not in fact been registered. [State Bank of India v Depro Foods Ltd. (1988) 64 Comp Cas 375 (P&H)].
10 November 2013
Time-limit for filing of e-Form 8 & 10:
E-Form 8 with complete requirement must be filed within a period of thirty days from the date of creation or modification of charge on online basis with the RoC. The particulars of charges in connection with issue of debentures of a series shall be filed with Registrar of Companies in Form 10, along with copy of instrument creating the charge and with the required filing fees as per Schedule X to the Companies Act, 1956, within a period of thirty days after the execution of deed containing the charge or if there is no such deed, after the execution of any debentures of the series. The concerned RoC may allow filing requisite particulars within a period of thirty days next following the expiry of initial thirty days after the date of creation or modification of charge subject to payment of such additional fee not exceeding ten times the amount of fee specified in Schedule X of the Companies Act. However, it is expected that only one time additional filing fee shall be charged by the computer as penalty.
If a charge created by the company falls within any of the classes as specified in section 125 (4), its particulars shall be filed with the Registrar of ompanies Act, 1956 within 30 days of creation of charge. If particulars of charge could not be filed within 30 days, the ROC has power to extend the said period by 30 more days subject to payment of additional filing fee by the Company. Particulars of creation of charge shall be filed in Form No. 8 & 13, in 3 sets, alongwith all the papers / instruments relating to creation of charge. Form No. 8 includes the following details : · Description of instrument creating the charge · Amount secured · Property charged · Terms & conditions of charge · Name & address of person entitled to charge Registrar of Companies (ROC) will verify the particulars filed under Form No. 8 & 13 and thereafter shall register charge which is conclusive evidence of compliance with the requirements as to registration of the charge. ROC shall deliver 2 sets duly registered under seal and signature, one for lender and second for borrower.
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